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2012 C. John Langley, Jr., Ph.D., and Capgemini. All Rights Reserved. No part of this document may be reproduced, displayed, modified or distributed by any process or means without prior written permission from Capgemini. Rightshore is a trademark belonging to Capgemini.
Table of Contents
Table of Contents
Executive Summary Current State of the 3PL Market Supply Chain Innovation The IT Gap Supply Chain Disruption Talent Management Strategic Assessment About the Study About the Sponsors 4 7 15 20 22 28 30 34 37
Supporting Organizations
Briefcase
A N A L Y T I C S
Transport Intelligence
CEDOL
CELSC
Center for Emerging Logistics and Supply Chains
I W L A
International Warehouse Logistics Association
FreightWatch
I N T E R N AT I O N A L
Executive Summary
Current State of the 3PL Market
The success of the third-party logistics industry is evident in the generally high marks given to 3PLs by respondents to a survey as part of the 2013 17th Annual Third Party Logistics Study, which identifies trends and explores how both 3PLs and shippers are using these relationships to improve and enhance their businesses and supply chains. A substantial 2,342 industry executives provided usable responses to the survey, including users and nonusers of 3PL services as well as 3PL providers. Despite challenging business conditions, aggregate global revenues for the 3PL sector continue to rise, and far more shippers (65%) are increasing their use of 3PL services than returning to insourcing (22%) some 3PL services. Nearly three in five (58%) shippers are reducing or consolidating the number of 3PLs they use. Shippers report spending an average 12% of revenues on logistics, and an average 39% of that figure is spent on outsourced logistics services. Outsourcing accounts for 54% of shippers transportation spend and 39% of warehouse operations spend. As found in past Annual 3PL Study surveys, transactional, operational, and repetitive activities such as transportation, warehousing, and freight forwarding tend to be the most frequently outsourced. Both shippers (86%) and 3PL providers (94%) largely view their relationships as successful, with shippers posting some impressive results from outsourcing: just over half (56%) say their use of 3PLs has led to year-overyear incremental benefits. They also report significant savings from logistics cost reductions (15%), inventory cost reductions (8%) and logistics fixed asset reductions (26%). Shippers are more satisfied than 3PLs (71% to 63%) with the openness, transparency and good communication in their relationships, and 67% of shipper respondents judge their 3PLs as sufficiently agile and flexible. Shippers openness to more strategic 3PL-shipper arrangements, including gainsharing and collaboration with other companies, appears to be declining somewhat. The IT Gap appears to have stabilized over the last few years, with 94% agreeing that IT is a necessary element of 3PL capability but just 53% indicating they are currently satisfied with 3PL IT capabilities. Contributors and potential solutions to this disparity are explored in the IT Gap section. and strategic relationships among all partners to develop the types of disruptive innovations needed to solve the vexing challenges facing todays supply chains. Current industry consensus is that 3PLs and shippers can facilitate supply chain innovation by leveraging organizational and technology-focused capabilities. Organizational drivers include fostering collaboration through structure, relationship governance, and embedding innovation into the organization. Technology drivers include advanced IT and mobile solutions, big data and analytics, and social media. Shippers assert that they are willing to pay 3PLs for investments required to drive innovation. Despite its limited use, gainsharing is the most favored method to fund this investment.
The IT Gap
The long-standing gap between the importance shippers assign to 3PLs IT capabilities and their satisfaction with 3PLs current IT capabilities which we call the IT Gap has stabilized at roughly a 40-point delta. The reason may be an ongoing disconnect between how the two groups view 3PL IT investments: 3PLs are more likely to describe their IT investments as aggressive compared to shippers, while shippers are much less likely to call 3PL investments aggressive (12% vs. 23% for 3PLs), and 35% say theyre conservative. Shippers relationships with 3PLs IT organizations are also less than ideal: 46% call these relationships project-focused, 29% tactical, and 14% are contentious. Shippers want 3PLs to offer comprehensive and easily integrated solutions. And the good news is that just over half of 3PLs anticipate making large investments in modernizing applications. But 3PLs cannot make the right IT choices until they have a clear picture of their customers supply chains, how they function, and the challenges they face. A collaborative approach between partners, featuring a relationship governance structure
Executive Summary
that includes IT, will further improve shipper satisfaction with 3PLs IT capabilities, drive increased innovation, and improve 3PL-shipper relationships.
such as employing total landed cost versus cost of goods sold, assessing risk/quality/service-related costs, and learning to spot caution flags. Such insights will enhance shippers ability to employ world-class supply chain management to drive profitability. Global Trade Management: Most companies believe global trade management is essential as they rely more heavily on global trade for growth in a weak economy. However, issues such as shifting trade lanes and new free trade agreements are making global trade more complex. Challenges include maintaining visibility of all purchase part information, coordinating free trade agreement information with suppliers, and ensuring qualification for different trade programs. Shippers that invest time and resources into global trade management best practices will be positioned to transform their global operations into a competitive advantage over their competitors. Big Data: Growing data volumes (sometimes called Big Data) generated from increased monitoring of more aspects of supply chain operations with greater frequency and granularity has emerged as a disruptive innovation opportunity for shippers and 3PLs. Converting this data into business value is the heart of the challenge and a driver for expanding 3PL relationships. To capitalize on this opportunity, 3PLs must be competent data managers, provide specialized IT tools, facilitate analysis, and adopt a knowledgecentric approach to their relationships with shippers.
Strategic Assessment
The study team continually monitors current topics in the overall supply chain industry as well as findings that emerge from the research. The following is a brief look at some timely subjects being considered for further exploration in next years Annual 3PL Study. X-shoring: We introduce the term X-shoring to address shippers moves toward rebalancing supply chains to be more flexible and adaptable, suggesting that shifting global economic conditions may frequently change preferred sourcing locations. The issues shippers confront in making X-shoring decisions to cope with a fluctuating global economy mirror those faced across the enterprise. Making these choices requires better data and improved decision-making strategies,
Companies that have successfully implemented effective supply chain mitigation plans often apply new thinking to traditional mitigation strategies.
Region
Two other high priorities for shippers and 3PLs are driving supply chain innovation as well as mitigating or eliminating supply chain disruption. Organizations that do either or both of these successfully create critical differentiation in the marketplace that can drive competitive advantage. The study team explores both of these in-depth as part of this years special topics coverage. The report also briefly considers the critical role talent management plays in attaining supply chain innovation and disruption capabilities, as well as the drivers and obstacles behind the ongoing gap between shippers expectations and 3PLs capabilities when it comes to IT.
Figure 2 also shows dramatic differences across geographies in the percentages of transportation and warehousing spend managed by third parties. Shipper respondents report that on average, outsourcing accounts for 54% of transportation spend, but these range from a low of 42% in North America and 45% in Asia-Pacific to 60% in Latin America and 71% in Europe. Asia-Pacifics 45% is down dramatically from the 60% shippers reported last year, which may be explained by a modest decrease in Asia-Pacific shippers that are reporting increased use of outsourcing logistics services this year. The percentage of shippers outsourcing warehouse operations is down slightly across all geographies except Europe, where it grew from 42% to 48% this year. This increased outsourcing of warehouse operations may be explained somewhat by the significant economic issues that have recently been impacting European business activity.
those that bring most logistics services back in-house which helps to explain some of the overall increase in global 3PL revenues discussed earlier. The measurement of these outsourcing/ insourcing trends tend to remain fairly stable year over year: - Outsourcing: 65% of shipper respondents report increases in their use of outsourced logistics services this year, compared with 64% and 65% in the last two years. North American growth lags the other regions by a modest amount. Threequarters of 3PL respondents see an increase in outsourcing among their shippers. - Insourcing: Generally, insourcing remains less prevalent, with 22% of global shippers indicating they are returning to insourcing many of their logistics activities. One region that evidences significant change from previous results is Europe, which dropped from 18% last year to 12% this year. 3PL reports of shippers in general returning to insourcing many of their logistics activities remains consistent at 37%. - Reducing or Consolidating 3PLs: The ongoing trend toward strategic sourcing that is occurring at many shipper firms shows up in the number who report they are reducing or consolidating the number of 3PLs they use, an average 58% globally. This is consistent with previous years findings and remains pretty constant across geographies as well. Interestingly, 3PLs are more likely than shippers (72%) to report that in general they see shippers reducing or consolidating the number of 3PLs they use.
32%
30%
So while rates of change to outsourcing/insourcing appear to remain stable in recent years, the general trend among global shippers is to increase their use of outsourced logistics services.
Europe
3PL services has led to year-over-year benefits. The biggest declines are in Asia-Pacific (60% to 51%) and Latin America (63% to 48%) also indicators that those regions are at a different point in the maturity of 3PL usage than North America and Europe.
Perhaps for those reasons, as well as some improvement in economic conditions, our research reveals recent declines in the openness of some shippers to more innovative 3PLshipper arrangements: Gainsharing between 3PLs and shippers is down. Two years ago, more than half of shippers (56%) reported having engaged in gainsharing arrangements with 3PLs. Last year it fell to 42% and this year its 37%. The lower percentages seem to be driven by year-over-year reductions in Asia-Pacific (46% to 35%) and in Latin America (a very striking 54% to 34%). Shippers in these regions appear to be more comfortable with fee-for-service arrangements, rather than incentivebased arrangements. More than half of 3PLs respondents (54%) say they have engaged in gainsharing agreements with customers, consistent with past reports. Interest in collaborating with other companies, even competitors, to achieve logistics cost and service improvements is also down. This strategy has not been wildly popular during the years we included it in the survey, with just 41% of shipper respondents this year reporting use of collaboration to achieve logistics cost and service improvements compared to 44% in last years study. Our interpretation is
As with past years, just over half of shipper respondents (56%, down from 60% last year) report their use of 3PLs has led to year-over-year incremental benefits, while 87% of 3PL providers say their customers decisions to use
Our research reveals recent declines in the openness of some shippers to more innovative 3PLshipper arrangements.
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not that shippers regard collaboration as unimportant, but rather that many 3PLs and shippers addressed collaboration first by seeking to establish an industry standard, rather than initially involving only a small number of partners to prove the concept, and subsequently expanding the resulting platform to others. As indicated in the next section, many shippers prefer 3PL relationships that are tactical and/or operational rather than strategic, making approaches such as gainsharing and collaboration less of a fit with their current methods for managing 3PL relationships.
and 71% across all regions studied), warehousing (63%), freight forwarding (53%), and customs brokerage (52%). The less-frequently used 3PL services tend to be somewhat more strategic, customer-facing, and IT-intensive, such as order management and fulfillment (16%), IT services (13%), supply chain consultancy services (10%), fleet management (8%), customer service (10%), and LLP/4PL services (8%). Another little-used 3PL offering is sustainability/green supply chainrelated services (6%). Green supply chain has seen varying levels of interest since we studied the topic closely for the 2008 3PL Study. This year, 52% of shippers say fuel efficiency and carbon emissions have become an important part of their 3PL procurement decision
Figure 4: 3PLs Offer More Logistics Services than Most Shippers Use
Shipper Percentages Outsourced Logistics Service International Transportation Domestic Transportation Warehousing Freight Forwarding Customs Brokerage Reverse Logistics (defective, repair, return) Cross-Docking Product Labeling, Packaging, Assembly, Kitting Transportation Planning and Management Inventory Management Freight Bill Auditing and Payment Order Management and Fulfillment Information Technology (IT) Services Service Parts Logistics Customer Service Supply Chain Consultancy Services Provided by 3PLs Fleet Management LLP (Lead Logistics Provider) / 4PL Services Sustainability/Green Supply Chain-Related Services
Source: 2013 Third-Party Logistics Study
Europe 86% 81 72 60 57 31 31 31 27 15 13 18 16 14 7 7 8 17 7
Asia-Pacic 79% 76 59 46 44 23 18 21 19 21 11 16 14 12 17 9 8 4 6
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processes. But just 26% of shipper respondents rely on 3PLs to provide visibility to fuel efficiency and carbon emissions information. The biggest changes occurred in Asia-Pacific, where the percentages dropped and are now more aligned with the figures for all regions. In Latin America 60% of shippers now see this data as important, but fewer (15%) are relying on 3PLs to provide this type of information.
Information Technologies
IT Gap
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It is interesting to note that the reasons for non-users electing not to use 3PLs have diminished over time. For example, from 2006 to 2008 the percentages of shippers selecting logistics is a core competency at our firm as a reason not to outsource were 38%, 37% and 45%, respectively. This contrasts markedly with data for 2010 (19%), 2011 (19%), and 2012 (15%). This suggests two things: First, over time there are fewer reasons why firms choose not to outsource. Second, in the past, non-users had more reason to question 3PLs capabilities and competencies. Now, they seem to be conceding that 3PLs have improved but they still feel they can do it better.
The reasons for nonusers electing not to use 3PLs have diminished over time.
Service-Level Commitments Would Not Be Realized Corporate Philosophy Excludes the Use of Outsourced Logistics Providers We Have More Logistics Expertise Than Most 3PL Providers
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Key Takeaways
Key findings about the Current State of the Market for the 2013 17th Annual 3PL Study include: t Despite the continuing volatility of global business environments, 3PLs are continuing to improve their business presence and create value for their customers. Aggregate global revenues for the 3PL sector continue to rise, particularly in Asia-Pacific and Latin America. A majority of shipper respondents (65%) are increasing their use of 3PL services, while 22% are returning to insourcing some 3PL services and 58% are reducing or consolidating the number of 3PLs they use. t Total logistics expenditures remain consistent at 12% of sales revenues for shipper respondents, and they spend on average 39% of their total logistics expenditures on outsourcing. Outsourcing accounts for 54% of shippers transportation spend and 39% of warehouse operations spend.
t Similar to last years results, most shipper respondents (86%) and most 3PL providers (94%) view their relationships as successful. Shippers report measurable logistics cost, inventory cost and logistics fixed asset reductions, and just over half (56%) say their use of 3PLs has led to year-over-year benefits. t Shippers are more satisfied than 3PLs (71% to 63%) with the openness, transparency, and good communication in their relationships, and 67% of shipper respondents judge their 3PLs as sufficiently agile and flexible. t Our measures indicate that the openness of some shippers to more innovative 3PL-shipper arrangements appears to be declining somewhat; gainsharing between 3PLs and shippers is down and interest in collaborating with other companies, even competitors, to achieve logistics cost and service improvements has also declined slightly since last year.
t Consistent with the past, transactional, operational, and repetitive activities tend to be the most frequently outsourced, in relatively consistent numbers, while 3PLs more strategic capabilities are underused, including IT capabilities. t Over the long term, the gap has narrowed between the value shippers place on 3PL IT capabilities (94% this year) and how they feel 3PLs are meeting their expectations (53%), but this IT Gap appears to have stabilized somewhat over the last few years. t The variety of reasons driving the decisions of shippers not currently outsourcing logistics are diminishing; main reasons continue to include a belief that logistics is a core competency of the organization and that cost reductions would not be realized through outsourcing.
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15
What Is Changing
Shippers are being pressured by multiple factors that must be addressed in their supply chains. Competition and pricing pressures are driving them to
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Some shippers also seem to lack confidence in 3PLs ability to operate at the strategic level necessary for disruptive innovation. The majority of 3PL respondents (89%) to the Annual 3PL Study survey believe they are ready to innovate. But just 53% of shippers agree and another 33% are not sure. There is a constant pressure on consistent delivery versus time out to innovate, said one workshop attendee. As seen in Figure 8, shippers and 3PLs think of themselves as the largest source of innovation, and the other as the second largest source.
Shippers
3PLs
IT Companies
Consultants
Other
The ability for 3PLs to drive innovation is not just important to satisfy shippers evolving needs. It is also necessary for 3PLs to remain profitable. At the ASE in Jersey City, NJ, Jim Carey, Senior Vice President Sales & Marketing at Clancy Companies, noted, Lack of innovation increases the chance of commoditization. It fosters commoditization, stagnancy and in the end, obsolescence.
Enriching Relationships
Fortunately, shippers and 3PLs agree on the factors it takes to develop infrastructure that supports innovation. Shipper respondents (93%) and 3PL respondents (89%) are nearly unanimous in their belief that 3PLs should have a defined structure for innovation. Even better, as seen in Figure 9, they also agree on the top drivers for innovation, although the order is slightly different. Shippers regard a trusting relationship as the most important driver, while 3PLs rank this second to talent/right people. Operational excellence, a culture of collaborative continuous improvement, and technology round out the top five.
Measurements/Metrics Financial Incentives (i.e., Gainsharing) Executive Commitment Process Integration Contractual Framework Exposure to Overall Business Challenges and Drivers Regulations (Government, Industry, etc.)
0% 13% 13%
44%
40%
50%
60%
70%
80%
3PLs
Source: 2013 Third-Party Logistics Study
Shippers
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The Current State of the 3PL Market section notes a moderate decline of interest in mechanisms that some believe would improve efficiency and effectiveness and drive innovation, such as gainsharing and interest in collaborating with other companies, even competitors. Those results are echoed in these findings: Both shippers and 3PLs gave lukewarm ranking to financial incentives as a driver of innovation. Contractual framework was rated even lower, with only 13% of shippers and 21% of 3PLs calling it a top driver. The contract is a framework for our collaboration, but not the actual collaboration, said Ciscos Jemdahl. So much is constantly in motion and happening. There are so many threads of info/input, and as I used to say, Facts arent, facts become, which tells us that whatever brought us here wont keep us here. We need talented people to navigate, conceptualize and act on all this. Only humans have that capability. People are responsible, not a project nor a contract nor a process.
because frequent contact builds trust, eases communication, and reduces the instinct for knowledge protection. More dimensions of relationship bring more opportunity to innovate, noted a participant at one of the Annual 3PL Study workshops. For 3PLs this means shifting to a decentralized structure with a seasoned, operations-focused 3PL representative on site at the shippers location, where 3PL and shipper can devise tailored solutions free from bureaucracy and standardized approaches. Conversely, the ideal model for a shipper is to create an Innovation Center of Excellence, a think tank focused exclusively on innovation. The success of the Center of Excellence in interacting with internal and external stakeholders to foster and implement innovation is critical for driving disruptive innovation. Relationship Governance: Simply boosting face time isnt enough, however. Current 3PL-shipper relationships are too often single point and do not bring the right people nor the right relationships into play. A formalized relationship management approach sets the stage for how the partners will drive the business and promote collaboration. Options include: t A tiered structure that vertically aligns the 3PLs and shippers top management, mid-management, and workforce. Each tier examines the relationships tactical, strategic, and transformational performance. t Horizontal, peer-to-peer mapping that matches employees from both the 3PL and shipper in similar tiers and roles. Once mapped, communications protocols establish how each set of peers can discuss tier-appropriate items. As companies become more global, horizontal integration can support more complex structures and interfaces. t Embedding Innovation into the Organization: Perhaps the biggest challenge in fostering disruptive innovation is developing a culture that promotes and rewards it. For
3PLs this often means shifting from a physical mindset focused on day-today operational delivery to one based on knowledge, including strategy collaboration and innovation. A transformation management process is a valuable means to create an environment that values innovation and embeds it in the vision. Murphy Ho, Regional Logistics Manager, Asia, of Celestica, noted this at the Hong Kong workshop: Its about relationships, relationships between 3PLs and shippers and also the relationships within organizations and between departments. Technology drivers Advanced IT and Mobile Solutions: As noted in the Current State of the 3PL Market section, the IT gap has been reduced by 21% over the past half-decade. But even with that improvement, the gap has stabilized in recent years, with just 53% of users saying their 3PL meets expectations. A major frustration is a lack of visibility. Use of SaaS- and cloud-based solutions together with robust, realtime, anywhere access to data enabled by mobile apps and smartphones hold promise for breaking through this barrier. Big Data and Analytics: Also offering great potential are technologies to gain control of the huge volumes of data generated by todays multifaceted supply chains. Emerging big data solutions, paired with robust analytics engines, will empower both 3PLs and shippers to find meaningful patterns and trends in data. That visibility is a key ingredient to revealing new opportunities for innovation. Managing the balance between visibility and data is critical to 3PLs and shippers, says Leanne Hill, Vice President, Global Supply Chain, Duty Free Shoppers. Getting this right can separate high-performing relationships and drive supply chain success, but to be successful in this area requires close collaboration between shippers and 3PLs.
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Social Media: A growing number of companies are learning to leverage social media to enhance communication across the supply chain. According to Social CRM in the Supply Chain, a fall 2011 report from IDC Research Services, logistics companies using social media identified significantly more benefits than non-users, especially around communication and tracking industry trends. A substantial 88% of respondents reported time savings greater than 10% using social media, and 60% said it improved their satisfaction with a supply chain vendor or partner somewhat or to a great extent. Social media can potentially facilitate the previously addressed horizontal integration model for relationship governance. Israel-based global generic pharmaceuticals leader Teva has used social media tools to create a virtual supply chain community for use by internal operations professionals and external suppliers, according to the IDC report. The spontaneous discussion fostered by social media led to an improvement in upstream supply lead time from 15% to 60%, and operational cycle time improved by 40% in four months. Funding Innovation Implementing the cultural and technical infrastructure to create an environment that supports development of disruptive innovation requires considerable investment. As seen in Figure 10, shippers assert that they are willing to pay 3PLs for the required investment. Interestingly, despite its relative unpopularity, shippers cite gainsharing as their chief means to fund this investment (49%), followed by additional business and pay for performance. 3PLs agree that shippers are willing to pay them for innovation, but see additional business as the leading method (43%).
Figure 10: Shippers and 3PLs Agree on Top Funding Source for Innovation
I Am Willing to Pay My 3PL for Innovation Shippers are Willing to Pay 3PL for Innovation
Yes - Gainsharing Yes - Additional Business Yes - Bonus for Performance Not sure No Shippers 3PLs 19% 19% 13%
49% 43%
t Shippers and 3PLs can facilitate supply chain innovation by leveraging organizational drivers such as fostering collaboration through structure, relationship governance, and embedding innovation into the organizations as well as technologyfocused drivers: advanced IT and mobile solutions, data and analytics, and social media. t Shippers assert that they are willing to pay 3PLs for the required investment in innovation.
Its about relationships, relationships between 3PLs and shippers and also the relationships within organizations and between departments.
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The IT Gap
Shippers feel strongly that IT capabilities are at the core of a 3PLs ability to provide value, as seen in Figure 6 in the Current State of the 3PL Market section. This years survey found nearly 25% of 3PLs are responding aggressively to fulfill this need, describing themselves as willing to adopt technologies while they are relatively new and risky while 52% of 3PLs call their IT investments mainstream and 26% call them conservative. Yet the difference between what shippers feel is important and their ratings of their 3PLs current IT capabilities has stabilized at around a 40-point gap. Shippers are much less likely to call 3PL
investments aggressive (12% vs. 23% for 3PLs), and 35% say theyre conservative. Its possible that 3PLs are simply not fully informing shippers about their IT capabilities. However, it is more likely that shippers are seeing what they have and finding it lacking. Similar to the overall 3PL-shipper relationship, shippers are most likely to call their relationship with their 3PLs IT group project-focused (46%) or tactical (29%), and 14% even describe the relationship as contentious (Figure 11). Just 11% of shippers say its strategic, while 3PLs are much more likely (23%) to describe the relationship their IT
department has with their customers as strategic. Shippers want 3PLs to offer comprehensive and easily integrated solutions. Yet there is an approximately 20% difference between shippers satisfaction with basic IT services and 3PLs ratings of their own capabilities, such as for IT operations, applications, integration and staffing (Figure 12). The resulting position shows a significant opportunity for 3PLs to improve their technical relationships with shippers. And in fact, 55% of shippers say they want to develop a strategic technical relationship with their 3PLs.
The IT Gap
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The good news is that 3PLs are hearing the call. Just over half of 3PL respondents say they are likely to make large investments in modernizing applications, and 65% plan on buying solutions to reduce client on-boarding costs, time, and effort. But these investments must not be made in a vacuum. 3PLs cannot make the right investments until they have a clear picture of their customers supply chains and the challenges they face. Some 3PLs regularly invite their customers to collaborative meetings, where these shippers share the issues they are struggling with and the 3PL develops a solution that they can then go market to other companies, such as developing an execution-based intransit visibility capability. A major question is what investment in time and resources is required by both parties to actually develop a strategic IT relationship, and is there enough value realized to justify the investment? These questions challenge the transactional relationship that often exists today, focused on KPIs and cost. More in-depth and timely communication sharing regarding shippers challenges and opportunities is required to align 3PLs priorities and investments. Ultimately, a collaborative approach to IT planning ensures 3PLs are investing in what shippers value, instead of what they think they value. Greater collaboration ensures a more strategic relationship. As seen in the innovation section, IT remains a key aspect and opportunity to drive innovation. With the right relationship governance structure that includes IT, collaboration between shippers and 3PLs will further improve shipper satisfaction with 3PL IT offerings, driving increased innovation and improving the overall relationship.
46%
29%
34%
31%
Figure 12: Percentage of Response of Above Average or Better Ratings for 3PL Capabilities
Reliability (e.g., Service Level Compliance) Stafng - Skills and Talent Information Transparency (e.g., Visibility, Analytics, etc.) On-boarding Time & Effort Technical Infrastructure Applications Support (e.g., Help Desk, Call Center) Methodologies and Governance Integration (B2B, Application to Application) IT Operations IT Consulting Services
0% 10% 20% 3PLs 38% 36% 35% 40% 34% 34% 33% 39% 31% 28% 27% 23% 30% 39% 40% 50% 60% 70% 50% 49% 49% 52% 67% 59% 63%
46%
55%
Shippers
22
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most effective risk mitigation tactics. So when disruptions inevitably occur, theyre caught short.
inputs. Shippers say extreme volatility in commodity, labor, or energy prices/ supply is their second largest source of supply chain disruption. Transportation infrastructure disruptions were another notable cause: 3PL respondents rated this as their number one source of supply chain disruption. Business operations, both internal and external, can be another frequent cause: A key person in an organization moves to another company, taking all process know-how with them, for example, or a component doesnt meet quality needs, halting production. Unplanned outages in IT or communications systems including hacking affected more than half the 3PLs responding to the Annual 3PL Study survey and 40% of companies studied by the Business Continuity Institute. Research published by CA Technologies in November 2011, The Avoidable Cost of Downtime, found two of the three corporate departments most impacted by an IT outage were operations and procurement, both supply chain-related.
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Political and economic factors are also causes of disruption. For example, in 2011 civil unrest from the Arab Spring impacted firms that rely on suppliers in Middle East or North African nations, particularly those that need the rare minerals and fossil fuels found in these regions.
Business continuity planning ranks highly and is a somewhat common risk management solution. However, these plans are often one-time projects for many companies. Groups are formed and plans made in the aftermath of a disruption, but no one is assigned adequate responsibility for maintaining processes and monitoring compliance. Over time the commitment fades, and the company is caught off guard when the next disruption ensues. A more advanced solution is the development of a risk management organization. This group does not have to be large or overly complex, but should have the skills and experience to define cross-functional solutions. This approach often produces more effective and efficient solutions, not relying solely on procurement or partners to identify and execute. Over time the group also spreads the knowledge of risk management so that in the future more employees consider risk in their everyday decisions.
The most-used tools for vendor risk assessment, according to the Briefcase Analytics survey:
t Contract clauses (83%) t Physical inspections (69%) t Vendor intelligence data (62%) t Vendor self-reporting (60%) t Vendor codes of conduct (49%)
Sources of data on companies of all sizes, both public and private, have expanded considerably over the past seven years. Thats allowing companies to work toward assessing 100 percent of their trading partners, rather than just public companies. Researchers have identified more than 600 publicly available databases reporting vendor risk data for more than 50 countries. Risk assessment firms such as Briefcase Analytics use advanced technologies and data-mining techniques on a global basis to help companies mitigate their supply chain risk and inform negotiation with suppliers.
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Figure 14: Shippers and 3PLs Aligned on Current and Future Mitigation Strategies
Current Mitigation Strategies Partnerships Business Continuity Planning Supply Chain Visibility Tools Employee Training / Talent Management Supplier Scorecarding Advanced Enterprise Risk Management Organization Supply Chain Mapping Decision Support Tools Insurance Disruption News Feeds 0% 10%
14% 15% 32% 32% 33% 30% 33% 29% 33% 44% 41% 43% 53% 50% 69% 68% 62% 61% 65% 64%
while companies acknowledge the frequency and impact of disruptions, many have done little to investigate the potential tools that are available to manage this risk. In most cases companies depend on partners or business continuity plans for this task.
t Capital unavailable. More than half
20% 3PL
30%
40%
50%
60%
70%
Shipper
Future Mitigation Strategies Supply Chain Visibility Tools Partnerships Employee Training / Talent Management Business Continuity Planning Supplier Scorecarding Decision Support Tools Supply Chain Mapping Advanced Enterprise Risk Management Organization Insurance Disruption News Feeds 0%
8% 7% 17% 15% 27% 35% 38% 41% 37% 37% 36% 36% 47% 56% 53% 52% 67% 61% 62% 70%
of shippers (55%) and 3PLs (57%) plan to invest less than $1 million on their supply chain disruption/ mitigation response capability, despite the increasing organizational focus they report on risk mitigation. This relates strongly to the fourthranked reason for underfunding: lack of executive commitment. It can be tough to sell the leadership on diverting budget to something that might happen when there are so many competing priorities that must or will happen.
t The feeling that current risk mitigation capability is not a problem. Often, this belief is a
10%
20% 3PL
30%
40%
50%
60%
70%
Shipper
result of the rather short lifespan of institutional memory. Those who experienced the companys most recent supply chain disruption first-hand move on, and those who follow do not have the same scars or memories. Several automakers with experience in managing through the disruptions caused by the September 11th attacks and the volcanic ash cloud were quickly reminded of the value of risk mitigation planning following the March 2011 earthquake and tsunami in Japan. The disaster closed down a factory operated by Merck Chemicals International of Germany that serves as the only source of Xirallic pigments,
for three months. As a result, at least six manufacturers lost a key markup opportunity with customers seeking the glittery, more intense and shiny finish the pigments enable, according to a May 2011 report from the Congressional Research Service. Manufacturers with more resilient supply chains were able to quickly obtain replacement colors from other sources, while others took longer. Combined with other parts shortages, the incident impacted second-quarter US production plans by as many as 400,000 units.
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We are increasingly seeing riskconscious customers engaging us to map and evaluate their supply chain networks, says Peter Karel, Global Head of Supply Chain Solutions, Panalpina. It is not only about monitoring the risk, but also about the resilience and effectiveness of their supply chains. Ensuring a continuous and effective operation of their supply chain is a critical aspect from the board room to shop floor. Business Continuity Planning: Business continuity plans not created once and put up on a shelf, but actively monitored, measured and modified are on the rise. The Business Continuity Institutes Global Supply Chain Resilience: Lessons Learned from the 2011 Earthquakes report found an increase in the number of US companies with such plans over the last five years, from 72% to 84%. The lessons learned through interviews with companies impacted by the earthquakes include: t Suppliers need to have tested continuity plans t Analysis must extend to Tier 2 and 3 suppliers, when appropriate
t A human behavior-based business continuity approach is essential, in addition to a technical one Risk Management Organizations: The secret to making a business continuity plan a living document is to assign clear responsibility for it. Risk management organizations work best as specifically trained professionals that work as extensions of the functional teams, rather than as bureaucratic outsiders. They own the plan and work collaboratively with the team and partners to ensure ongoing processes and decisions are in line with its tenets, educating team members and developing a cross-functional risk management culture. Supply Chain Visibility Tools: Members of the supply chain network must share enough information to ensure complete visibility into status and events. Just hours after Japans 2011 earthquake and tsunami, construction equipment maker Caterpillar was able to determine which containers and inventory had remained in an affected port and which had made it onto a ship and out of harms way, and adjust
t Transparency: Do the members of the supply chain network share enough information to deliver value? t Talent: Does the supply chain network have the talent necessary to innovate and compete in the long run? t Scalability: Does the supply chain have the ability to increase production based on demand? t Finance: Do suppliers have any financial constraints that inhibit their ability to fulfill business obligations? t Geography: Are suppliers located in unsafe places? Do firms or suppliers over-rely on one specific region or channel? t Reliance: Is the firm relying too much on certain suppliers throughout the supply chain? t Regulation: Do laws and regulations impact how firms and suppliers operate in certain areas? A complete mitigation and continuity strategy often includes the following: Supply Chain Mapping: Supply chain mapping is an essential first step to measuring and monitoring risk; if you dont know you have a Tier 3 supplier in Thailand, you dont know that a flood there will impact your business. Mapping identifies the most critical operations and the points of greatest vulnerability. Partnerships: Companies best equipped to react rapidly to supply chain disruptions are those that take a collaborative approach to managing their supply chains. Third-party logistics companies can be invaluable partners in helping shippers assess their supply chain risks and formulate plans to make them more agile and resilient.
Figure 15: Shippers and 3PLs Have Many Reasons for Underfunding Mitigation
Future Mitigation Strategies Lack of Understanding of Available Tools for Supply Chain Disruption Response/Mitigation Lack of Available Capitals Supply Chain Disruption Mitigation/Response Capability has not been a Problem Lack of Executive Support Inability to Build Business Case for Investments Lack of Partnership Support (e.g., Suppliers, Buyers, 3PLs) Other
0% 5% 7% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 30% 26% 36% 37% 39% 35% 42% 42% 43% 41% 46% 49%
3PL
Source: 2013 Third-Party Logistics Study
Shipper
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production schedules to keep plants running. Competitors were not so well-prepared and had to shut down production, according to Supply Chain Management. Supplier Scorecarding is a valuable tool for ensuring compliance with mitigation requirements and collaborating on continuous improvement efforts. Insurance: Insurance and option/ future pricing are increasingly being used to mitigate and recoup losses. For example, companies in the food industry are more often purchasing recall insurance as regulation increases. Another common strategy is requiring suppliers to be sufficiently insured. Companies that have successfully implemented effective supply chain mitigation solutions often apply new
thinking to traditional mitigation strategies. For example, instead of consolidating suppliers, they may shift to a more diverse set of suppliers that offer varied levels of risk. They may pursue a deep knowledge of suppliers, instead of the basic knowledge they have now. And they may replace a justin-time strategy for all inventory with one that selectively stockpiles the most critical items and components. Among the lessons from recent natural disasters is that a victim mentality is not an appropriate response to supply chain disruption. A focused assessment of the current state of the network is the first step to understanding the risk, followed by a well-considered plan of attack to both mitigate the biggest sources of vulnerability and respond when disruptions occur.
The experiences of companies that have successfully managed through disruptions with proactive, disciplined planning prove that a sound mitigation strategy can both avoid costs and create a competitive advantage, making supply chains more resilient without exorbitant costs.
Government Regulation: This measure provides insight into the potential for delays due to government regulations, such as unpredictable customs procedures. Labor Unrest: This assessment provides insight into the historical events in a specific region, such as port strikes or protests that cause road closures, and provides a rate at which a shipper can expect delays. Natural Disasters/Weather: This analysis provides insight into the annual weather patterns of a given region and a rate at which a shipper can expect weather to disrupt the supply chain. The Monitoring Process The process starts by documenting the transportation lanes to understand how shipments are moving from origin to destination. This includes identifying routes and modes of transportation, and from there all the possible roads, ports, airports, railroads, and transshipment locations a companys cargo will pass through. Once this information is gathered, FreightWatch applies the six lenses of supply chain disruption, providing clarity into the likelihood of disruption.
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Talent Management
Managing Innovation & Disruption: It takes Talent
every day, in my view, said Stephen Fraser, former CEO of Horizon Lines and current Board Member, PODS. Having the right CIO and IT team in place and intimately integrating IT and corporate strategy is essential to meeting demand, retaining customers, and defending/growing market share through differentiation of product and service delivery. This is no longer a matter of IT enabling or enhancing strategy. IT has become elemental to strategy. This commitment is evident in the research for the 2013 Annual 3PL Study. A significant 65% of 3PLs and 50% of shippers indicate that employee training/talent management/internal and external certifications constitute some of the top tools they currently use to mitigate and manage supply chain disruptions. (See Figure 14) A crisis is no time to be dusting off a static action plan and assigning responsibilities. Companies that make a commitment to talent management ensure the right talent is in place and prepared to execute on those action plans the moment they are required; 70% of 3PLs and 54% of shippers plan to invest heavily in employee training/talent management/internal and external certifications over the next two years to address supply chain disruption (Figure 14). These companies know that strong leadership and talent is essential to properly drive innovation and respond to potential disruptions. However, as illustrated in Figure 16, recruiting the right people is only the beginning. To sustain a high level of business performance, organizations must be able to continuously adapt and change to deal with todays volatile, complex, and ambiguous market dynamics. When organizations are able to link their people strategy to their business strategy, they gain the ultimate competitive advantage.
Talent Management
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The most critical issue in transportation and logistics is still great intellectual capital, said Jack Gross, CEO, Haney Truck Line. However, it is not just finding potential associates, but applying the talent and ability of each person to a need within the organization not just filling in an organization chart. Without this sense of worth, really good people will be short-term employees.
This study has long documented the high expectations shippers have of 3PLs technology. As noted in Figure 6, shippers are nearly unanimous (94%) in their belief that information technologies are a necessary element of 3PL expertise. Yet just 53% are satisfied with 3PL IT capabilities the difference is known as the IT Gap. Many 3PLs, formed through a series of acquisitions or grown from family businesses, have refrained from making heavy investments in technology for a variety of technical, cultural, and financial reasons. However, demand for innovation is starting to change their stance. In recent months many leading 3PLs have been recruiting experienced CIOs and best-in-class IT talent in response to customer demand. Theyre searching in adjacent services businesses as well as in the IT industry itself.
Change is underway within shippers as well. In some organizations the IT function is being merged with supply chain organizations in recognition of the strong dependency of logistics on data. Such developments bode well for narrowing the IT Gap. Increased attention to developing IT talent on both sides of the 3PL-shipper relationship promises to help remove obstacles and increase the commitment to effective use of IT. Strong talent in IT drives capabilities both in innovation and managing disruption.
Figure 16: Effective Talent Management Links People Strategy to Business Strategy
Ma
Leadership Development
Re cru itm en t
30
Strategic Assessment
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Strategic Assessment
Here is a brief look at some topics triggered by the research and current industry trends that are being considered for a closer look in next years Annual 3PL Study. Current and recent Annual 3PL Studies have looked in depth at several topics related to X-shoring, including globalization, emerging markets, total landed cost, supply chain innovation, and disruption. Although each of these has broad implications for both business and supply chains, our main focus has been on the perspectives of both users and providers of 3PL services. As these types of organizations prepare for continually changing global business environments, we have observed that the issues and challenges they face are also those faced by businesses as a whole and their trading partners. Given the high stakes that are involved, we feel many questions deserve better answers than are currently available, including the following: t Overall, what are the pros and cons of shifting manufacturing, planning, strategic sourcing, logistics management and other activities closer to consumption/daily operations? t There are reasonably complete lists of costs and benefits that need to be quantified in a comprehensive, total landed cost (TLC) analysis. So why are many of todays X-shoring decisions made on the limited scope of cost of goods sold (COGS) only, or on a limited number of additional relevant costs and benefits? t What impact does a potential location mean in terms of language support, skill set availability, alignment of working hours, and ample talent pool to support growth and scale? t One of the premises of making decisions in todays changing business environment is some version of change being the only constant. To the extent that this is true, then how do we commit to X-shoring decisions that will have an intermediate- to longer-term shelf-life? t How do we deal with some of the less-tangible factors that can and should impact significant X-shoring decisions? Examples include: risk/ quality/service-related costs, impact on innovation, impact on customer goodwill that may be affected by locational realities, time-zone advantages, and the realities of environmental sustainability including measures such as carbon footprint. t Previous Annual 3PL Studies have documented that 3PLs are viewed as valuable players in the management of change as it applies to businesses and supply chains. So what can be done to encourage shippers and 3PLs to engage in more collaborative leadership to address changing priorities such as moving to X-shoring? t The move to X-shoring can generate significant benefits for supply chains and overall businesses, but what are the principal caution flags to look for so that one does not replace one set of problems with another? t While it is likely that globalization will continue as a source of new revenue and cost reduction, to what extent will X-shoring continue to play a role in global supply chain operations? Insight into these issues will provide some useful ideas into how we can enhance understanding of the principles of supply chain management and help to grow our businesses more profitably through the power of worldclass supply chain management.
How do you engage your partners in benefiting from new X-shoring strategies? How do 3PLs and shippers engage each other in developing infrastructures to maximize these changes in strategies?
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with FTAs as an opportunity to unlock benefits. Tariffs and non-tariff barriers (for example, technical product regulations) are often a matter of public policy and there is little companies can do to avert this cost. However, understanding and being prepared to address import procedures can create a competitive advantage for companies. For most companies, the challenges of trade compliance include, among others, the following: t Understanding which FTAs they are eligible for based upon the origin of different purchased parts t Maintaining visibility of all purchase part information (for example, tariff number, ship date, number of units, mode of transportation) t Coordinating with suppliers to obtain all required FTA information (certificate of origin, trade program certificate, etc.) to establish compliance with a trade program t Collecting duty savings by qualifying bills of material of saleable goods for different trade programs As the trend toward increased global trade, competitiveness, and complexity continues, it is likely that companies will remain focused on Global Trade Management. Those that invest the time and resources into leading practices such as implementation of automated Global Trade Management solutions will find they are able to transform their global operations into a competitive advantage. Companies that are unable or unwilling to make these investments will likely find it more difficult to compete.
How do you handle global trade management today and what would you need to do differently to attain more benefits in the future?
Converting the data into business value is the heart of the challenge
Strategic Assessment
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While focusing on moving goods may find incremental handling economies, it will likely miss the game-changing transformational insights which come from better management of big data.
data is captured, integrated, and made available to external parties. Part of this job is to provide reliability indicators on the data. Shippers making key decisions need to know to what extent they can trust results from 3PL data. 2. The 3PL needs to be a facilitator to the data consumer. Manual handling of large data sets is awkward and unrealistic, especially in multi-media formats when the data is a mix of text, photos, GPS coordinates, and serial/lot numbers. Likewise, most shippers do not have a system where they centralize every data point prior to analysis. Instead, data analysis is distributed among many small systems and mashed-up with execution and planning systems. In short, making sense of large and complex data requires specialized IT tools, which are becoming part of shippers expectations of 3PLs. Beyond just having a system, the differentiation among 3PLs also turns on how deeply embedded the data analysis can be with the execution system. Swivel-chair integration between two systems belonging to the 3PL is considered outdated. As the water level of data rises, shippers want to know if their 3PL will throw them a lifeline and help them navigate or drag them under and slow them down.
3. The 3PL must be aligned in staffing and processes to capitalize on the rich opportunities hiding in the data they have available. Shippers have short patience for a materials-only viewpoint, in which the core function of the 3PL is to move stuff. So long as shippers see their own businesses in a broader context, and to the extent that the 3PL is sitting on data which can make a shippers business excel, there is a growing need for 3PLs to leverage data instead of just materials. While focusing on moving goods may find incremental handling economies, it will likely miss the game-changing transformational insights which come from better management of big data.
Will Big Data present opportunities or threats to 3PLs? How can 3PLs and shippers work together to manage Big Data?
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t Webcasts conducted with media and publications such as Supply Chain Management Review, Logistics Management, and others. Supporting Organizations: Each year a number of supply chain organizations facilitate the research process by asking members and other contacts to respond to the survey, or contribute content for the report. In addition to completing the survey, individual companies help out by enabling executives to participate in focus interviews and facilitated workshops. Please see the Credits page for a listing of these valued contributors. Definitions: Survey recipients were asked to think of a third-party logistics (3PL) provider as a company that provides one or more logistics services for its clients and customers. A fourthparty logistics (4PL) provider is one that may manage multiple logistics providers or orchestrate broader aspects of a customers supply chain. To ensure confidentiality and objectivity, 3PL users were not asked to name which specific 3PL providers they use. A Note about the Name: For years the study, unveiled each October, was branded with the year in which it was published. In 2011 the team made a change, instead branding the study with the year in which the results will enjoy the most active and lively discussion. Therefore, this report, published in October 2012, is titled the 2013 Third Party Logistics Study: Results and Findings of the 17th Annual Study.
Supply Chain Disruption: Understanding what can be done by 3PLs and their customers to develop strategies and operational capabilities to mitigate or eliminate sources of supply chain disruption. Considering that supply chain disruptions generally come from four main areas (natural factors; physical infrastructure outages; business operations failures; and economic and political factors), it is essential that shippers and their 3PL customers work together effectively to jointly protect their supply chains. Goals for Additional Material: t The Talent section briefly explores the critical role of talent as a strategic agenda item in most, if not all, organizations. Additionally, the study looks at the role talent plays in realizing innovation goals, managing supply chain disruption, and ensuring CEO succession. t Goals for the Information Technology section include determining what drives shippers expectations of 3PLs technical capabilities and subsequently, where 3PLs can focus to improve this aspect of their overall relationship. t Based on what was learned from the study process, the team uses the Strategic Assessment to develop a perspective on improving 3PLshipper relationships.
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Figure 19 includes all shipper respondents anticipated total sales for 2012. As with last years study, 37% of the respondents represent companies in the lowest sales category a higher percentage than in previous years. We attribute this to a greater percentage of respondents from emerging economies in regions such as Asia-Pacific and Latin America. 3PL Providers: 3PL executives and managers responded to a similar, but separate version of the survey. 3PL respondents represent: 1) a wide spread of operating geographies; 2) an extensive list of industries served (actually quite similar to the shipperrespondent industries); and 3) a range of titles, from managers to presidents/ CEOs. Approximately 40% of the 3PL firms expected 2012 company revenues in excess of US $1 billion (approximately 750 million), while about 50% reported revenues of less than US$500 million (approximately 375 million).
7%
Additional
17%
10%
Consumer products
Figure 19: Nearly 50% of 3PL User Respondents Anticipated 2012 Sales in Excess of US $1 Billion ( 750 Million)
100% 90% 80% 70% 60% 50% 16% 40% 30% 51% 20% 10% 0% 37% 33% 40% 36% 15% 11% 19% 30% 34% 33% 27% 17% 17% 18% 18% 18% 13% 19%
US$25 billion or more / 20 billion or more US$1 billion less than US$25 billion / 750 million less than 20 billion US$500 million less than US$1 billion / 375 million less than 750 million Less than US$500 million / 375 million
All Regions
North America
Europe
Asia Pacic
Latin America
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The Panalpina Group The Panalpina Group is one of the worlds leading providers of supply chain solutions, combining intercontinental Air and Ocean Freight with comprehensive Value-Added Logistics Services and Supply Chain Services. Thanks to its in-depth industry know-how and customized IT systems, Panalpina provides globally integrated door-to-door solutions tailored to its customers supply chain management needs. The Panalpina Group operates a global network with some 500 branches in more than 80 countries. In a further 80 countries, it cooperates closely with partner companies. Panalpina employs approximately 15,500 people worldwide. Panalpina has extensive experience with customers in many key industries. With dedicated experts in key global markets, Panalpina has the people, products, skills and capabilities to meet the demanding needs of its global customers. Panalpina delivers reliable Supply Chain Solutions that provide value to its customers- every time. No matter what the size, exact business and location is Panalpina is always driven by qualitative, safety-related and environmental principles that best serve its customers and thus the companys own long-term interest. For more information please visit www.panalpina.com.
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About Korn/Ferry International Korn/Ferry International is a premier global provider of talent management solutions, with a presence throughout the Americas, Asia Pacific, Europe, the Middle East and Africa. The firm delivers services and solutions that help clients cultivate greatness through the attraction, engagement, development and retention of their talent. Visit www.kornferry.com for more information on Korn/Ferry International, and www.kornferryinstitute.com for thought leadership, intellectual property and research.
eyefortransport Established in 1998, eyefortransport has become one of the leading providers of business intelligence, independent research, news and executive level events for the supply chain & logistics industries. eyefortransport has two primary focuses. 1) To provide executive networking opportunities in the supply chain & logistics industries via the more than 15 events we annually organize and host in North America, Europe and Asia and online via the tens of thousands of users of www.eft.com. The events are designed to complement and enhance the business connections available through our online network, and bring together the industry elite. Regularly attended by CEOs and senior management from the transport and logistics industry and Heads of Supply Chain of major companies, the events focus on current developments and latest trends, and are enhanced by high-level, exclusive networking opportunities. 2) To deliver industry education through dozens of industry reports, surveys, newsletters, webinars and senior-level presentations at leading events. For the list of current research, news and conferences we produce please visit www.eft.com.
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Credits
Dan Albright Mark Baker Glenn Barnes Frank Behrens Sebastien Beignez Serge Belliard John Benson Stephan Buchli Jim Carey Anna Cerda Jane Chan Diana Chan Raymond Cheung Henry Chiu Eric Chu Neil Collins Zack Deming Stefan Engelbrecht Gregor Fiabane Brett Fletcher Boney Fong Mariano Gilardon Patrick Gueth Heidi Hoffman Leanne Hill Murphy Ho Sven Hoemmken Juergen Hoenig Ryan Huen Johan Jemdahl Rick Jordon Peter Karel Casey Kelly Michael Kong William Lai Simon Lam Stephen Lam Dr. John Langley Sandy Lau Capgemini Consulting Pfizer Panalpina GT Nexus Casino Global Sourcing Panalpina Capgemini Panalpina Clancy Companies Huawei L'Oreal Hong Kong Ltd Korn Ferry Triumph Avery Dennison Clariant Korn/Ferry Korn/Ferry Amer Sports Korn/Ferry Capgemini Consulting Fresenius Medical Care Asia-Oacific Korn/Ferry Panalpina Management Ltd. Korn/Ferry DFS Hong Kong Celestica Panalpina Management Ltd. Nokia Siemens Networks Benetton Tandberg (div. of Cisco) Panalpina Panalpina Management Ltd. Korn Ferry Panalpina Dickson Concepts (International) Ltd Bosch Rexroth China Giorgio Armani Hong Kong Ltd Penn State University Publications International Jeff Lee Ron Lentz Thierry Lescuyer Holly Leung Patrick Leung David Liu Richard Lo Atif Malik Marc Mandaroux John Manners-Bell Jean-Franois Martinot Andreas Mattle Myles McGrath Jonah McIntire Chris Moye Brenda Ng Maxime Oubrayrie Tilo Raab David Reid Ivo Roex Chris Saynor Corina Schweighauser Nansen So Fannie Sung Mike Swartz Polly Tang Philip Teo Lisa Terry Helen Tse Quentin Tse Shirman Tze Shanton Wilcox Graham Wilkie Onal Wong Nick Wyss Annie Yip Felix Yue Crystal Zhu BECTON DICKINSON ASIA LTD G@ Capital Advisor Technicolor Celestica Celestica Commscope Avery Dennison Levi Strauss Brightstar Tech Data Transport Intelligence Ltd. Essilor Artist Lajobi Panalpina Management Ltd. Lajobi Panalpina Essilor Panalpina Panalpina Steinhoff International Sourcing eyefortransport Panalpina Management Ltd. Olympus Corporation of Asia Pacific Ltd. Olympus Corporation of Asia Pacific Ltd. deHaven Group, LLC Guess Asia Philips Lisa Terry Editorial Serices Guess Asia Res Partners Avery Dennison Capgemini Consulting Carrefour Guess Asia Panalpina Management Ltd. BECTON DICKINSON ASIA LTD Philips HGST (Hitachi)
For additional copies of this publication or for more information about the study, please contact any of the following:
C. John Langley Jr., Ph.D. Clinical Professor of Supply Chain Management Director of Development, Center for Supply Chain Research (CSCR) Penn State University University Park, PA T: +1 814 865 1866 jlangley@psu.edu
Peter Karel Global Head of Supply Chain Solutions Panalpina Management Ltd. T: +41 61 226 15 54 peter.karel@panalpina.com
Stephan Buchli Corporate Head of Marketing Panalpina Management Ltd. T: +41 61 226 1111 Stephan.buchli@panalpina.com
Dan Albright Senior Vice President, North America Supply Chain Leader Capgemini Consulting Atlanta, GA, USA T: +1 404 806 2169 dan.albright@capgemini.com
Shanton Wilcox Principal, Logistics and Fulfillment Leader Capgemini Consulting Atlanta, GA, USA T: +1 404 431 8895 shanton.wilcox@capgemini.com
Neil Collins Senior Client Partner Global Sector Leader, Logistics & Transportation Services KORN/FERRY INTERNATIONAL Atlanta, GA, USA T: +1 404 783 8811 neil.collins@kornferry.com
Brett Fletcher Capgemini Consulting Atlanta, GA, USA T: +1 404 277 8332 brett.fletcher@capgemini.com
Zack Deming Principal KORN/FERRY INTERNATIONAL Atlanta, GA, USA T: +1 404 222 4057 zack.deming@kornferry.com
Sven Hoemmken Executive Vice President, Global Head of Marketing and Sales Panalpina Management Ltd. Basel, Switzerland T: +41 61 226 1111 sven.hoemmken@panalpina.com
Casey Kelly Senior Client Partner Global Industrial Markets, Asia-Pacific KORN/FERRY INTERNATIONAL T: +65 9169 0024 casey.kelly@kornferry.com
Lucas Kuehner Managing Director, USA Panalpina Inc. T: +1 973 254 5723 lucas.kuehner@panalpina.com
Chris Saynor CEO eyefortransport T: 1800 814 3459 ext 7529 (from USA); T: 1866 996 1235 ext 7529 (from Canada); T: +44 20 7375 7529 (from Rest of the World) csaynor@eft.com
Patrick Gueth Global Head of Industry Vertical Hi - Tech Panalpina Management Ltd. Frankfurt, Germany T: +49 6105 937 0 patrick.gueth@panalpina.com
Katherine OReilly Executive Director eyefortransport T: +44 (0)20 7375 7207 T: 1800 814 3459 ext 7207 koreilly@eft.com